MuCulloch v. Maryland 17 U.S. (4 Wheat.) 136 (1819) McCulloch was the 'cashier' of the Bank of the United States, which was owned by the Federal government. Maryland levied a tax on the bank. McCulloch refused to pay. MuCulloch noted that Maryland was taxing the Federal Bank, but not the Maryland State Bank. Maryland was taxing the Federal bank because they felt that there shouldn't be a Federal bank at all. They felt that the States should be the ones that control the money supply. Maryland sued in Maryland State Court and unsurprisingly won. MuCulloch was appealed to the US Supreme Court. At the time, the States were still wary of the powers of the Federal government, and so the Maryland court was probably pretty biased. US Supreme Court found: The US Supreme Court first found that the US Federal Government had the right to own a bank. The Court noted that the bill creating the bank was debated in Congress and Maryland is represented there. If they didn't like the idea of a Federal bank they could have tried to block the bill creating it The Court found that although there is nothing in the Constitution that explicitly states that the Federal Government can create a bank, there is nothing that says it can't! The Article of Confederation specifically limited Federal powers to what was explicitly stated. The Constitution does not have that clause. The Constitution says nothing about owning a bank, but it does explicitly talk about raising money and regulating commerce. Obviously you can't do those things if you don't own a bank. The Constitution says that Congress can make all laws necessary and proper to enforcing the Constitution. Necessary means things that the government must do. Proper means things that are within the Constitution's power to do. The Court found that the Constitution was ratified by people not States. So therefore it is the will of the people, and not something States have the option of agreeing or disagreeing with. The power to create a bank rests with the people, not the State of Maryland. The Court found that the Constitution and the Federal Government, though limited in its powers, is supreme within its sphere of action. When doing what the Constitution says it can do, the Federal Government overrides the State governments, and no State can control it. Residents of a State cannot vote for the legislatures of other States, therefore, they cannot be taxed by those other States. In a similar manner, the State of Maryland cannot tax a Federal Institution because it is instrument of all Americans. (The whole can operate on a part, but a part cannot operate on the whole). The Court found that if a State needed to raise revenue, they could tax the property the bank was on, but, they would have to tax all banks at the same rate. If it is uniformly imposed on everyone in the jurisdiction, then it is fair because residents of that jurisdiction have a reason to keep it fair. Nowhere in the text of the Constitution does it say that a State cannot tax a Federal Instrumentality. However, if all a State does is to tax a Federal institution, then the bill gets paid by all Americans and only the residents of that particular State will benefit. This will lead to States creating oppressive taxes on Federal institutions because politicians won't have to worry about their voters getting angry about high taxes. This case is an example of the doctrine of implied powers in the Constitution, which allowed the Federal government to pass laws not expressly provided for in the Constitution's list of enumerated powers as long as they are in useful furtherance of those powers. In this case Justice Marshall argued that if a Constitution did explicitly contain everything it is meant to do, it would be far too long to ever read. This doctrine significantly expanded the powers of the Legislature. "Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and the spirit of the Constitution."